I really don't understand the OP's confusion. I just had a quick look at that CNET review, and from the quoted passages it's fairly clear what they're saying.
1. If you have an older amp that lacks the ability to decode the HD audio formats, or it doesn't have HDMI, you can use the analogue outputs on the BD55 to achive lossless audio.
2. If you have an HDMI enabled amp capable of accepting multi channel LPCM, there's little point spending more money on the BD55 over the BD35 because you can just send the audio over HDMI. If your amp can decode the HD audio formats it's even simpler, as you can just bitstream the audio to be decoded externally (without getting into the whole internal/external decoding argument).
3. The PS3 is essentially a very powerful computer and it is much better with interactive features. There is no question about that - it's fact. Comparing it to standalone players is like comparing apples to oranges, yet every single review I've seen insists on doing so. The PS3 is also heavily subsidised by software sales (hence the price), standalones are not. Newer Profile 2.0 BD players are closer in terms of functionality and speed, but still behind , although in my experience the Sony S550 is pretty close in terms of speed (interestingly that review claimed a load time of about 01:35 for Spider-Man 3 on the BD55, but it's more like 30 seconds on the S550).
Even so, you have to ask yourself if the vast majority of people even have AV equipment to do the reportedly superior analogue output on the BD55 justice. It's for this and several other reasons that the PS3 has several adantages over standalones for the average user (such as the aforementioned speed, compatibility, ease of use, price, the ability to play games and stream various forms of media). Of course it has its failings, such as its lack of analogue output for legacy amps (so you'e limited to lossy audio), its considerable fan noise and its power consumption.
CNET aren't saying one is better than the other, they're just listing the pros and cons of each system. Personally I went for a combination of price and performance with the S550. It's a much better machine than either of my previous BD players, it approaching the speed of my PS3 for interactive content and it was £75 cheaper than the cheapest price I've found for the BD55. I don't have thousands of pounds worth of speakers, so I severely doubt I'd hear any appreciable difference between the Sony and the Panasonic in my living room using analogue or any other form of connection.